This book answers all of your questions about why financial aid doesn’t work

If you’ve attended college in the past decade or so, you probably know that the way the government funds higher education isn’t working.

Sara Goldrick-Rab, professor of higher education policy and sociology at Temple University, knows that the financial aid system is fundamentally broken, and reminiscent of a time when a college degree wasn’t the only path out of poverty — and she explains all of its flaws in her new book, Paying The Price: College Costs, Financial Aid, and The Betrayal of the American Dream.

Goldrick-Rab follows the lives of six students, all of whom are Pell Grant recipients, come from families with adjusted gross incomes of just under $25,000, and participated in the Wisconsin Scholars Longitudinal Study — a statewide study on the impact of college financial aid.

Many of these students beat the odds, which were clearly stacked against them the moment they enrolled in college. Throughout the book, Goldrick-Rab explains how it is much more difficult for these students to work a certain number of hours a week, pay for their education, and still excel in their academic work. She also explains why she wants to get rid of means testing — or deciding that middle class students should receive less aid than poor students — why cost of attendance is inaccurate, and why reform should start with making the first two years of a student’s education free.

ThinkProgress: One of the key points you make at the beginning of the book is that the bones of the financial aid system are very old, and were created at a time when college was not the only path out of poverty. Can you talk about the historical context in which these decisions were made and how our context has changed since then?

Sara Goldrick-Rab: It was created at a very particular moment. There was all of this good will toward expanding opportunity to people who others viewed as poor and downtrodden, and college was going to provide an uplift. And what was seen as going to stop people from being able to succeed in college, I would argue, was kind of rudimentary. The basic gist was people thought, “Well we know there are some people who can’t pay even the lowest prices, so what we will do is try to set up a system that will suss out who is needy from those who are not. And we’ll just make sure we give the money to those who need it.”

In that sense, it’s very focused on means testing and trying to create this dividing line between the needs of students. The assumption is the system will eventually deliver the money and deliver it in a way that is useful for people and give them what they need. So there wasn’t any sense of possibility that what was delivered to people wouldn’t cover their needs.

“When I went out to look up close at the people working their way through the system, I just was pretty stunned to see the great extent to which it was failing.”

It was a time of a pretty robust economy. The middle class was growing and each generation was pulling ahead of the last one, and I think these are kind sunshiney conditions — not completely unlike the Bill Clinton era to some extent — but there were changes even then. I think under those conditions, it can feel rosy and optimistic that this system will be okay.

As I tried to explain in the book, things never lived up to those concerns. A lot of states never really committed to the Pell program by matching that with their appropriations or need-based state aid. And yet we marched forward over time with this basic assumption that, at least for the poor, things are basically okay, and that the basic core assumptions — including the means testing — were okay. But when I went out to look up close at the people working their way through the system, I just was pretty stunned to see the great extent to which it was failing.

Throughout the book, you repeat the statement that “financial aid is not cash” because of the expectations attached. Should we be providing students with more information on what is expected of them, or should we have more consistent expectations (as you mention isn’t the case with academic requirements for financial aid), or both?

Well I think when I say “it’s not cash,” part of the reason I say it in these stark terms is that it actually takes a lot of people by surprise. People who have not interacted with the system do think that. They literally do think that the student goes to the equivalent of the ATM and there’s the money.

It is really far from the truth and the extent to which the student does get the money, the extent to which the student has to get it, in my view really undermines the good will with which it was supposed to be delivered.

So the process of trying to get the money begins to feel at best frustrated and at worst abused, like they’re put through the ringer with ‘What do you need?’ and ‘Why do you need it?’ and ‘Are you keeping up with the requirements for it?’ So I don’t think it’s a matter of more information. I think that’s where policy is right now. We’re really big on information and big on behavioral issues, like if we just tell students how much time it will take to do the FAFSA, it will be okay. Or if we just get them information so they’re well advised to submit on time, we’ll be okay.

No, it’s not okay, even when they do those things. If we just explain to them that we meant well, would that be okay? No, no, no. People don’t trust the government generally and they don’t trust the system. Actually, a paper I wrote after my book was just released this morning, and it explains that what we know from social psychology is one of the most basic tenants of good policy-making is that it is trustworthy. And there is an abundance of evidence that shows that is completely missing from financial aid.

You criticize the FAFSA a lot and, in particular, expected family contribution. How does EFC fail to recognize the reality of students from low-income families and the fact that parents don’t always provide kids the information they need?

Well on its face, I want to get rid of it. I don’t want there to be an expected family contribution and I don’t want there to be a FAFSA.

I was just sent Hillary Clinton’s new calculator and I’m a bit horrified, frankly, that we’re creating this. I know it looks simpler than the FAFSA — but for Pete’s sake, we’re still asking people what they make and what they owe in an effort to act as though they are some subset of Americans who need help paying for college, when in fact they are the majority of Americans who need help paying for college.

The means test affects a very small subset and you just need to target them. And you know, while my book is about Pell recipients, what I’m planning to do is study people who aren’t Pell recipients. I’m firmly of the belief that they’re absolutely right that the price of college has gone well beyond what they can manage. So I don’t think we need to compute extra family contribution if it isn’t worth computing and it’s false to begin with. I think we can bend over backwards trying to build a better mousetrap here but eventually we have to ask ourselves why we’re building the mousetrap.

You talk about this narrative that perhaps “some” students aren’t supposed to go to college, or aren’t financially responsible enough to go to college — but although students can be irresponsible, most low-income students were doing their best. Can you talk about some of the choices these students are making every day?

SGR: They’re stereotyping. It’s flat-out stereotyping. Look, we engage with lots of students in the study and I certainly admit that we saw a little bit of the kinds of behavior that sometimes when I’m in policy crowds, people start talking about, like “Pell runners.” I didn’t actually see any Pell running but I did see someone misuse their student aid money by spending it on alcohol. Now Tyler is one of the six characters of the book and I have to tell you it wasn’t the easiest thing in the world to say, ‘I want to show America this guy.’ But I showed him for a reason. I did that because it’s true. But he is very much in the minority.

I think it’s fine to say sure, there are always going to be people who didn’t do everything you wanted them to do with the aid you provide. But there is a greater good here of realizing that most people are trying every hard. I wrote about this partly because I had data to respond to what were just shallow accusations. I mean, how many times have I been in a D.C. conversation where I heard people say “Well, you know,” and they can’t give an example. They can’t give an anecdote. They can’t give anything. But they’re just convinced the money is being wasted.

CQ: You were mentioning that a lot of these students are providing money to their families as well, so they have that burden. Though I guess they don’t think of it as a burden they have to deal with, that is also the reality.

SGR: It is, and some of them do also feel like it is a burden. It’s one of the most complicated things I’ve ever written about. And I struggled with it for a long time. It’s not something I talked about in the study until now because what they’re going through is complicated. I mean on the one hand, they know perfectly well they need that money for school, but they also know they wouldn’t be in school if it weren’t for their parents, so there is this reciprocity of ‘You help me and I’ll help you, even if frankly it kind of hurts me to help you,’ and I think the most frustrating part is that they act like they’re ashamed.

They hide it from their financial aid officers, and it’s because they feel like they’re going to be castigated for doing what ought to be a very all American kind of thing — helping one’s family. It’s like they’re cheating, and they’re not cheating. The funny thing is if this were another outside of a financial aid policy and you look at policies aimed at the poor, people have found for many years it’s best to just let people without money figure out how to spend their money, they will give it to the people who need it the most. And that’s what these students are doing. These children, and that is still what they are, they are someone’s children, they are assessing who most needs that money, and sometimes they’re deciding it’s not them.

CQ: The argument often goes, “Students should just work part-time like I did when I went to school 20 years ago,” but you say the research shows working more than 20 hours a week is associated with higher dropout rates. Why is this expectation unrealistic for low-income students?

SGR: I think they’re missing so many ways in which 2015 is not 1975. Frankly it’s not even 1995. I struggle with this one too a bit because to be honest, I worked my way through college. My family would look on paper like they had the money to send me to college and didn’t have that money and so I didn’t really qualify for aid and I waited tables, and I worked a ton. I worked a lot of times at 40 hours a week waiting tables so several things have changed. If I wanted to work 40 hours, I could work 40 hours.

“I think they’re missing so many ways in which 2015 is not 1975.”

And we’re increasingly seeing employers not give people the hours they need. They’re giving them less. So we can’t assume a student working 17 hours isn’t trying to work more hours, and isn’t actually searching for another job to work more hours. The other thing is the tips and wages changed. So I was pocketing my tips in cash. That was awesome and frankly those days are over and that has declined, so you can’t make the money you used to make waiting tables. The other thing is that I don’t know how I made it as well I did, because I worked regularly late at night and we never talk about when they work.

I talk about a student who fell asleep in my class and I didn’t know what was going on there until I figured out that she was working a graveyard shift. And I didn’t find out until the randomized experiment, we could reduce graveyard shift work by giving students more grant aid. They graduated college at higher rates. It isn’t all about how many hours a week they work but how many hours a week they need to work to make ends meet and what time of day they’re working.

So if I was counseling a student today, I would immediately begin by asking if they were working but when they were working and then I would try my best to find them a job that didn’t interfere with class but that didn’t also interfere with their sleep. And good luck finding it. Today’s lousy economy for part-time workers is affecting undergrads.

CQ: One of the students you profiled in the book, Chloe, went into the military because she said she liked the structure — and last the reader knew, the University of Phoenix was contacting her. Did she say what drew her to the University of Phoenix, and what is appeal of these colleges for low-income students?

SGR: Look, nothing was drawing her. They were targeting her.

The issue of the veterans and the money was not the focus of this study… But we know the larger story about what happened there [about for-profit colleges targeting veterans for federal student aid money] and convenience is what is going to drive Chloe’s next move — guaranteed.

I learned so much from listening to her talk about trying to construct her schedule to make college affordable, and how unbelievably difficult that became, and her desire for structure afterward. When she was talking about that, I thought, “Wow how many 18, 19, and 20 year olds are saying, ‘Can you just tell me what to do?’”

But it sort of made sense, because they struggle for their freedom and then you hand them their freedom and it’s filled with so much financial risk and loss, and it’s so much of a bigger financial mess than she ever thought she would be in. And so of course you want some structure when you’re in that situation. If the risks were lower, I’m sure she would feel she could make her own decisions but because the stakes were so high, she just wanted to be told ‘How do you handle this?” And again, financial education would not have solved this. She was not mismanaging her money.

Someone might have told her to take the loan sooner and don’t take two jobs, I guess, but if you size up her chances of even getting through a year of college, I’m not sure she should have taken more loans. And if I have a Ph.D, and I can’t figure out what this woman’s financial education should have been, then I’m skeptical that would have been the solution for her.

CQ: It seems like there just wasn’t a way for her to make it work, ultimately.

SGR: No. It is just she is exactly the kind of student for whom college was an experiment. Could this work for her? The fact that she wanted it, that she had a career goal, but it was never certain if she would make it through. It would have been so much better if her first couple years were free so she could have figured it out and got her feet under her and focused on her studies. Then if she did that, then it would have been reasonable to say if you’re going to keep going for a bachelor’s then you need to borrow a little more money.

Then you know how to do college by the time you start doing that. At least you have a clear idea of whether you can handle this and whether you want this. Maybe she could have gotten her certificate and pursued a bachelor’s degree even while was working. So that’s why she is exactly the kind of person with that [two-year] degree program she could have been done by now. I saw very little in her that told me that she couldn’t manage to make it if you took the money out of the loop. It wasn’t that it was all the money, but it would have been a lot easier if she wasn’t so stressed out.